PRICE COMPETITION PROMPTS BJ's TO DROP PHARMACIES

FEBRUARY 01, 2007

The first major casualty of the retail industry's ongoing
generic drug price wars appears to be BJ's Wholesale Club, a
171-unit warehouse store chain that has announced plans to
close down its in-store pharmacies due to shrinking profit
margins. BJ's opened its first pharmacy less than 5 years ago.
It followed the lead of Wal-Mart, Target, and other major
chains by slashing prices on prescriptions for hundreds of
generic drugs to $4 last fall.
Although industry analysts cited
a variety of factors in the chain's
decision to abandon its pharmacy operations, depressed profits
due to the generic prescription price competition may have
been the final straw for BJ's.

The closure of all 46 in-store pharmacies was estimated to
have been complete by February 3, 2007. A spokesperson for
BJ's said the company would not comment on the decision to
disband the pharmacy. In a conference call with investors last
week, however, Interim Chief Executive Officer Herb Zarkin said
BJ's prescription business was not growing. "It just didn't make
a lot of sense for us to keep putting the investment in," he said.